1) sound is perfectly fine, great. but noise when using with distrotion. Noise increases when i touch the strings, knobs or the switch. I guess its due to the grouding problem. Rechecked all the connections, not able to find the reason for this. Even tried grounding the bridge. Doesnt solve it either. Even the guitar cavity in the backside (where all electronics are present), you touch it creates the noise. Please provide me a solution.

2) Volume knob works perfectly fine. But at its maximum, the sound goes 'nil'

3) Inorder to test whether all the wirings were perfect i removed the neck pickup and kept the switch in the neck position. Strangely sound was coming from my amp. Now is this normal? As per my understanding, when in neck position only the neck bridge picks up the string vibrations. So guess it must be some connection error. Especially on the soldering done on top of the volume control.

the pickup wire should have a shielded kind of 'fence' metal wrapping around another wire in the ccenter, the core. the core should not be touching the 'fence' and should be going to your switch. the fence is what connects to the pot's back

if that makes sense... I figured this could be the case since I got confused for a few seconds on what was going on in that diagram myself

correct me if i am wrong...
so the pickup wire should be connected to the switch.... and only the braid of the pickwire should be soldered to the casing of the volume pot.
what i have done was, soldered both the pickup wire and the wire coming from the switch to the casing of the volume pot... so i guess whenever i was playing both the pickups were catching the signal....